Casandra was a daughter of the King and Queen of Troy who, according to Greek Mythology, was cursed to utter prophecies that were true that nobody believed. The modern day Anti-Cassandras are making prophecies of dire economic scenarios that are proving to be false that "everyone" in the media believes to be true. Maybe we should call them Ardnassacs. This week we received solid, even strong, economic data from new and existing home sales, weekly unemployment claims, and first quarter GDP.
(April 22) Last week a March Real Estate Forecast article and the new Home Construction data Article for March were published. This week we received the existing home sales and the New Home Sales data. "March Existing Home Sales Blooming" explained how the Inventory level increased month to month and March to March. It also explained how we are still near historically low inventory levels for this month of the year. This lack of inventory held back existing home sales. The average sales price was a March Record.
(April 23) The March New Home Sales data was better than the existing home sales data. The article "March New Home Sales Surprise" details how we had the most March New Home Sales since March 2007, how inventory, while down from February is up by over 15% from march 2018, and that the average sales price rose from the level record during March 2018. It is important to know that we are already ahead of sales compared to where we were during March 2018.
(April 25) Weekly unemployment claims used to be "headline news at the bottom of the hour." That was prior to the 2016 Presidential Election. We have had more than 200 consecutive weeks where we have had the seasonally adjusted first time unemployment claims data at or under 300,000 claims. We have had more than 100 weeks of seasonally adjusted continuing claims below 2 million claims. The insured unemployment rate is well below 2.0%. "April Weekly Unemployment Claims: Mixed" explains how while the first-time claims data edged up from last week's level that they continuing claims level fell and the insured unemployment rate dropped to 1.19%
(April 26) The Ardnassacs where looking for a fifth rate hike during 2018 while the original story was that we would see five rate hikes between 2018 and 2019. These "Chicken Little Economists" were making forecasts of a 2019 Recession after the massive December Correction in the major markets. The "Scrooge Slide" was actually a number of entities "locking in gains" for 2018 who started reinvesting this quarter. The Advance First Quarter GDP, according to the Ardnassacs of the media we were going t drop to 0.5% growth this quarter as a result of the Government Shutdown. "First Quarter GDP Hits 3.2%" explains how the economy is firing on all cylinders. There are eight cylinders: Quarter to quarter Personal Consumption Expenditures (PCE,) Gross Private Domestic Investment (GPDI,) Net Exports, and Government Consumption Expenditures (GCE,) and the Same Quarter PCE, GPDI, Net Exports, and GCE. All eight cylinders were positive this quarter. The Chicken Littles and Ardnassacs were screaming that the was "soft" PCE data. They ignored the jump quarter to quarter (Q2Q) of exports of 3.7% and the decline of imports by 3.7%. Net exports rose.
Momentum, Inertia, and Resistance. The naysayers, the Ardnassacs and Chicken Littles, are saying that this is either momentum from the Obama Administration or that the momentum is running low. The Obama Economy peaked during First Quarter of 2015. The Trump economy may not peaked as of yet. Inertia was moving us lower during 2016, now the economy is heading higher quarter to quarter, on a same quarter basis. We may have two or three quarters of growth until we hit 3.9%. Could we see a 4% quarter under the Trump Administration. "Time will tell."
Next week we will receive the April ADP report and the April Jobs Report data. Will the non-seasonally adjusted and the seasonally adjusted first-time claims level drop below 200,000 claims next week and next month? Probably. Stay tuned for those forecast articles and the "results" articles. Is this column "Cassandra-like" in that it has been projecting good data for jobs and the economy? I'd rather be Cassandra than Ardnassac or Chicken Little.
One last thing: Unemployment may start to rise as more workers enter the economy. The U-3 Unemployment rate could increase this month even as the continuing claims dropped from Mid-February to Mid-March. Some in the media will comment on the Job Openings data with the unemployment level. The U-3 Unemployment data comes from the Current Population Survey (CPS) data. The "headline jobs data" is the worker data from the Current Employment Statistics (CES) data. The Job Openings data is from the JOLTS Job Opening and Labor Turnover Survey data. The JOLTS data resembles, and is different from, the CES data. Imagine a brother and two fraternal twins. Similar. Related. Totally different. This data this week was solid. Next week could be phenominal.
It's the Economy.
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